Imax Warns Theaters About GSCA Program

In
November, Imax Corporation’s Therese Andrade called more
than 30 IMAX theaters to warn them that participating in the Giant
Screen Cinema Association’s new “Bigger. Bolder. Better.”
marketing program might violate the terms of their IMAX system leases.
According to several theater representatives who spoke with LF
Examiner, Andrade, who is vice president of sales, and not a lawyer,
suggested in the calls that the GSCA’s trademarked tagline and
“Certified Giant Screen” logos were “unapproved third-party
trademarks.” Andrade did not specify what actions the company proposed
to take in response to the program, leaving most recipients of the calls
puzzled and uncertain how to proceed.

The
BBB program was launched by the GSCA at its conference in
Chattanooga
in September (see LF Examiner, October 2010) and has been adopted
by 30 theaters to date. Developed over the past 18 months, the program
is intended to “differentiate the giant-screen experience and support
members in their efforts to communicate and market that
differentiation.” It features the market-tested tagline “Bigger.
Bolder. Better.” and “Certified Giant Screen” logos to advise
consumers that the theater meets the association’s criteria for giant
screens. The logos and tagline can be used on internal signage, print
ads, rack cards, Web sites, and other locations.

After
theaters began receiving the warnings from Imax, the GSCA issued a
statement saying that it had gone to “tremendous lengths to be certain
that the program preserved the integrity of one of our members’ most
valuable features — the IMAX brand — and consulted many interested
parties, including Imax.” It added that legal counsel had been sought
on the program’s trademarks.

The
statement concluded, “GSCA believes that all giant screen theaters
offer a premium, immersive movie experience, and we created our
certification and marketing programs to help our members succeed by
clearly communicating one of their theater’s unique differences.
Because the GSCA Board of Directors believes the program will bring
welcome added value to all of its member theaters, manufacturers,
producers, and service providers, we will continue to promote the
Certified Giant Screen and ‘Bigger. Bolder. Better.’ trademarks and
provide the supporting program materials.”

Imax’s
Andrade is a member of the GSCA board and was involved with the BBB
program at every step of its development. Members of the GSCA board met
directly with Imax executives about the program on more than one
occasion.

Several
theater operators who spoke with LFX expressed the opinion that
Imax was using the implicit threat of a lawsuit to prevent them from
highlighting — accurately and truthfully — the differences between
their giant-screen film theaters and the smaller IMAX digital theaters
that have sprung up in multiplexes near them in the past few years.

If
so, the tactic seems to have worked in at least a few cases. The GSCA
has posted a map showing BBB members on its Web site, and at least six
theaters that were listed there before the calls have since asked to be
removed from the site.

Many
of the other participating theaters told LFX that they would wait
for advice from counsel before implementing or going further with the
BBB program. Several who had asked Imax to put its concerns in writing
said they had not yet received a letter, more than a month after the
first calls.

As
this issue went to press, a check of the Web sites of the 30 current
participants found five that were displaying the Certified Giant Screen
logo, although several others told LF Examiner they were using it
internally.

Imax’s
position

In
an interview with LFX, Rob Lister, Imax’s senior
executive vice president and general counsel, explained that trademark
holders have a duty and right to prevent the weakening of their marks,
and that the company had three specific concerns about the BBB tagline
and Certified Giant Screen logos, based on trademark case law:

Confusion.Since the marks may appear on IMAX and non-IMAX theaters,
consumers could see non-IMAX presentations of lesser quality and assume
they were representative of IMAX presentations.

Consistency.
The function of a trademark is to consistently identify the source of a
product or service. The use of the BBB marks by some IMAX theaters and
not by others could weaken the consistency of the IMAX brand.

Distinctiveness.
The purpose of a trademark is to help consumers distinguish one
company’s goods or services from another’s. Lister said Imax was
concerned about possible “damage to the distinctiveness and goodwill
of the IMAX brand if consumers are no longer able to distinguish between
IMAX theaters and non-IMAX theaters from a quality standpoint if both of
them are tagged with the same[BBB]
brand.”

Lister
said that the company’s obligation and authority to protect the brand
arises from
U.S.
trademark law, and that its contracts with theaters allow it to
“impose reasonable quality control measures” on their use of its
brand.

Asked
why these concerns hadn’t been raised in the nearly two years that the
program had been under development, Lister claimed that Imax had
“consistently express[ed] its concern” about it, and said didn’t
believe the GSCA board could have gotten the impression that Imax had
“endorsed” it or considered it as “anything other than
problematic.” (Lister did not attend any of the meetings in question.
Mary Ruby, Imax’s senior vice president for legal affairs, took part
in at least one.)

He
told LFX, “As a general
matter we’re extremely reluctant to get involved in legal disputes
with the trade association or especially with our individual licensees.
I don’t think we ever wanted to ratchet it up to the point where we
suggested we would take legal action. But we were consistent all along
with expressing concern with regard to the [BBB] mark, even if that
concern didn’t rise to the level of citing specific legal or
contractual language.”

Lister
said the decision to have Andrade call the theaters had been his, to
make the approach more personal. “To send legal letters around to
people leaves a bad taste in people’s mouths.” He said that those
who had asked for details in writing should have received them.

On
the question of screen size that is at the heart of the dispute, Lister
repeated the official Imax line that there is no single characteristic
that defines “The IMAX Experience,” but suggested that a new
marketing campaign the company is developing would address the concerns
that led to the development of the BBB program. He didn’t provide
details or say when the campaign would be announced, but said “this
situation has been an impetus to working a little bit harder on it and
trying to roll it out a little bit quicker.”

Lister
declined to speculate on what actions the company might take with
theaters that continue to use the BBB marks, but stated flatly that,
from Imax’s standpoint, “the unauthorized use of third-party
trademarks cannot happen.”